Full Judgment Text
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PETITIONER:
TARKESHWAR SIO THAKUR JIU
Vs.
RESPONDENT:
BAR DASS DEY & CO. AND ORS.
DATE OF JUDGMENT06/02/1979
BENCH:
SARKARIA, RANJIT SINGH
BENCH:
SARKARIA, RANJIT SINGH
REDDY, O. CHINNAPPA (J)
CITATION:
1979 AIR 1669 1979 SCC (3) 106
CITATOR INFO :
RF 1987 SC1713 (10)
ACT:
Transfer of Property Act, 1882 (Act IV) Sections 105,
108 read with s. 3(26) of the General Clauses Act-"
Immovable Property" definition of, explained.
Mines Act, 1952, s. 2(i) read with Cl. (c) and (d) of
s. 3 of the Mines a Minerals (Regulation and Development)
Act, (No.67 of 1957), Scope of.
West Bengal Estates Acquisition Act, 1953, Section
6(1)(i), 27 and 28, scope of.
Words and Phrases "Any" "directly worked by him" in s.
28 of the West Bengal Estates Acquisition Act, 1953, meaning
of-Interpretation of a document-Regard must be had to the
substance and not the words or the form.
HEADNOTE:
The appellant idol, a juristic person, was exercising
the rights, through the Shebait, Mohanta Srimati Dandi
Swami, of a Darpatnidar in the land in suit. By a lease-deed
(Ex. A), dated July 10, 1941, the appellant granted to the
respondents a lease of the suit land for the purpose of
raising and taking sand out of the land for a period of nine
years ending on July 13, 1949. Subsequently, on April 27,
1950, the appellant made a similar grant (Ex. I) for another
nine years expiring on April 13, 1959, but this grant was
called "licence". The respondents did not pay the licence
fee for the period 1362 (14-4-1955) to 1365 B.S. The
appellant thereupon issued notice dated March 31, 1966,
terminating the ’licence’ and then filed a suit No. 37 of
1960 for ejectment of the respondent in the Court of the
Munsiff, Chandernagore. The trial court having dismissed the
suit, the appellant filed a first appeal which was allowed.
In second appeal the High Court restored the decree of the
trial court.
In appeal by special leave to this Court, it was
contended on behalf of the appellant:
(a) The transaction evidenced by the document (Ex. I)
dated April 277 1950 was a ’license’ for taking away sand
and not a ’lease’ of immovable property. Therefore, the
appellant-intermediary will be considered to be in Khas
possession of the holding on the date of vesting (April 1,
1955) through the licensee and as such. entitled to retain
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it under Section 6 of the Bengal Estates Acquisition Act.
1953;
(b) Section 28 of the Bengal Estates Acquisition Act,
1953 is not applicable because there was no ’mine’ in the
suit land, as defined in the Central Act 67 of 1957; the
sand deposits naturally exist on the surface and not below
it and mere collection and removal of the sand from the
surface did not constitute mining operations. therefore, it
could not be said that the suit land was comprised in a mine
or appertained to a mine within the meaning of the said
Section 28;
(c) Even if the land was a ’mine’ or appertained to a
mine, the mine was being worked by the appellant through a
licensee, and as such, was being
19
’directly worked’ by the appellant-intermediary within the
contemplation of Section 28 of the Bengal Estates
Acquisition Act, and therefore, the land would be deemed to
have been leased to the appellant by the Government.
Rejecting these contentions, and dismissing the appeal,
^
HELD: A. In ascertaining whether a document evidences a
’lease’ or a ’licence’, regard must be had to the substance
of the transaction and not merely the words or the form in
which it is dressed. [26F] .
The document (Ex. I the Agreement), in the instant case
reveals the following characteristics. which show that in
fact and substance, it is a ’lease" and not a ’licence’:
[27E, 32C]
(i) A right to "raise’ and "take out" and remove sand
"lying inside" the land in dispute was granted by the
plaintiff to the defendant. The words "raise" and "take out
sand" from "inside" the land are wide enough to include not
only the "right to carry out all the operations" necessary
for extracting sand, but also to take it away and
appropriate it. Construed in the context of the document as
a whole, these words put it beyond doubt that right to carry
out "mining operations" [within the definition in Cl. (d) of
s. 3 of the Central Act 67 of 1957] for winning sand and to
appropriate it, were granted. [27F-G]
(ii) The rights were granted for a period of 9 years,
commencing from April 27. 1950. [27H]
(iii) These rights were granted for a "price" fixed on
yearly basis, irrespective of the quantity of sand
extracted. The "price" fixed is Rs. 66/- per annum. This
consideration is payable in the month of Chaitra every year.
In case of default, the First Party (grantee) shall not be
entitled "to raise the sand next year" and the Second Party
(grantor) shall have a right to recover the arrears of rent
together, with interest at 12% by bringing a suit against
the First Party. [28A-B]
(iv) "The Second Party will be entitled to take Khas
possession of land" "at the end of the stipulated period.
This condition, (contained in paragraph 4 of Ex. 1) read
along with the other parts of the document necessarily
implies that if the First Party continues to pay the
"price", as stipulated, (a) he shall be entitled to enter
into and remain in exclusive khas possession of the land for
the purpose of carrying out the mining operations for the
full stipulated period of 9 years and (b) the Second Party
(plaintiff) will not be entitled to retake khas possession
of the land and revoke the so-called "licence" before the
end of the said period of 9 years. [28B-D]
The term "lease" occurring in the definition of "mining
lease" given in cl. (c) of s. 3 of the Mines and Minerals
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(Regulation and Development) Act is not used in the narrow
technical sense in which it is defined in s. 105 of the
Transfer of Property Act. A mining lease may not
meticulously and strictly satisfy in all cases, all the
characteristics of a "lease" as defined in the Transfer of
Property Act. Nevertheless, in the accepted legal sense, it
has always been regarded as a lease in this country. [29E-G]
In the instant case the transaction evidenced by Ex. I
not only falls within the definition of a mining lease under
Act, 67 of 1957, but also partakes of
20
all the essential characteristics of a "lease" defined in s.
105 of the Transfer of Property Act. [30-A-B]
Balakrishna Pal v. Jagannath Marwari, ILR 59 Cal. 1314;
approved
Raj Kumar Thakur Girdhari Singh v. Megh Lal Pandey LR
44 I.A. 246; Gowan v. Christie, [1873] LR 2 HL (SC) 278;
differed.
The negative definition of "immovable property" given
in s. 3, Para 1 of the Transfer of Property Act, 1882, is
not exhaustive. Therefore, applying the definition given in
s. 3(26) of the General Clauses Act (X of 1897) to the
expression used in the Transfer of Property Act, except as
modified by the definition in the first clause of s. 3 every
interest in immovable property or a benefit arising out of
land, will be ’immovable property’ for the purpose of s.
105, Transfer of Property Act. [30E-G]
A right to carry on mining operations in land to
extract a specified mineral and to remove and appropriate
that mineral, is a right to enjoy immovable property within
the meaning of s. 105, more so, when it is coupled with a
right to be in its exclusive khas possession for a specified
period. The right to enjoy immovable property spoken of in
s. 105, means the right to enjoy the property in the manner
in which that property can be enjoyed. If the subject matter
of the lease is mineral land or a sand-mine, it can be
enjoyed and occupied by the lessee by working it as
indicated in s. 108 of the Transfer of Property Act which
regulates the rights and liabilities, of lessors and lessees
of immovable property, [30G-H, 31A]
Nageshwar Bux Roy v. Bengal Coal Company, [1930] LR 58
IA 29; applied.
H. V. Low & Co. Ltd. v. Joyti Prasad Singh Deo, [1931]
ILR 59 Cal. 699; LR 58 IA 392. differed from.
Commissioner of Income Tax, Bihar and Orissa v. Kumar
Kanakhaya Narain Singh, ILR (XX) Patna 13; approved.
The true character of the transaction evidenced by the
document (Ex. 1) being that of a ’lease’ and not a
’licence,’ Section 6(1)(i) of the West Bengal Estates
Acquisition Act, 1953 will not cover the appellant’s case
and give him a right to retain the land in dispute, even if
section 28 of that Act was out of the way. [32C-D.]
B. The definition of "mining operations" and "mine", in
the Central Act 67 of 1957 are very wide. The expression
"winning of mineral" in the definition of "mining operations
is spacious enough to comprehend every activity by which the
mineral is extracted or obtained from the earth,
irrespective of whether such activity is carried out on the
surface or in the bowels of the earth. Mines and minerals
need not always be sub-soil and there can be minerals on the
surface of the earth. [24G]
B. Dass v. State of U.P. [1976] 3 S.C.R. 869,
reiterated.
It is true that in the definition of "mine", the term
"excavation" in the ordinary dictionary sense means "hole",
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"hollow" or "cavity made by digging out". But the word "any"
prefixed to "excavation" in the context of the phrase "for
the purpose of searching for or obtaining mineral" gives it
a
21
much more extensive connotation, so that every "excavation",
be it in the shape of an open cast cavity or a sub-terranean
tunnelling, will fall within the definition of ’mining
operations’. The essence of ’mining operations’ is that it
must be an activity for winning a mineral, whether on the
surface or beneath the surface of the earth. [24H, 25A-B]
In tho instant case, the land in dispute has large
deposits of sand, which is a minor mineral. The sand was
admittedly being excavated and removed by the respondent
lessee. The land was, thus, at the date of vesting, "com-
prised in or appertained to a ’mine’ within the meaning of
s. 28 of the West Bengal Estates Acquisition Act, 1953.
[25B-C]
C. The phrase "being directly worked by him" in s. 28
of the West Bengal Estates Acquisition Act, 1953, will not
take in a case where the mine was being worked through a
lessee or licensee to whom the right to conduct mining
operations and to take away the mineral had been granted by
the intermediary in consideration of receiving a periodic
rent, royalty or a like amount. [25E-F]
The word "directly" means "in a direct way, without a
person or thing coming between", immediately as directly
responsible. The use of the expression "directly" in the
context of the word "worked", followed by the words "by him"
unmistakably shows that the legislative intent was to allow
only those intermediaries to retain land comprised in or
appertaining to a mine, as lessees under the State, who
immediately before the date of vesting, were working the
mine under their immediate control, management and
supervision. [25C-E]
Section 28 of the West Bengal Estates Acquisition Act,
1953 denies the right to retain the land comprised in a mine
or appertaining to a mine, if, at the material date, it was
not being directly worked by the intermediary but through a
licensee, or other agency to whom the right to conduct
mining operations had been granted by the intermediary. In
that respect, the provisions of s.28 are contrary to those
of s. 6(1)(i), which give to an intermediary a right to
retain land held by him in khas for the purpose mentioned
therein through a licensee. In this situation, according to
the legislative mandate in s. 27, the provisions of s. 6(1)
(i) must yield to those in s. 28. [26 B-C]
Thus, even on the assumption that the respondent was at
the material date, holding the land in Khas through a
licensee and fulfilling all other conditions which entitled
him to retain under section 6 (1) (i), then also, the case
being in conflict with section 28, the latter section would
prevail over the former.
[26D & 32E]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2218 of
1969.
Appeal by Special Leave from the Judgment and Decree
dated 14-3-1969 of the Calcutta High Court in appeal from
Appellate Decree No 718 of 1962.
D. N. Mukherjee and N. R. Chaudkary for the Appellant.
Purshottam Chatterjee, P. K. Chatterjee and Rathin Das,
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for the Respondents.
The Judgment of tho Court was delivered by
SARKARIA, J.-This appeal by special leave is directed
against a judgment, dated March 14, 1969, of the High Court
at Calcutta.
22
The appellant had the interest of a Darpatnidar in the
land in suit, measuring 9 acres (27 bighas). The plaintiff
by a lease-deed (Ex.A) dated July 10, 1941, granted to the
defendant-respondents a lease of this land for the purpose
of raising and taking sand out of the land for a period of 9
years ending on July 13, 1949. In this lease deed, the
property was described to be Patni Mahal. Under the terms of
this lease, the lessee had an option of renewal for another
9 years. Subsequently on April 27, 1950, appellant made a
similar grant (Ex.I) for another 9 years expiring on April
13, 1959 but this grant was called a "licence".
The respondents did not pay the licence fee for the
period from 1362 (14-4-1955) to 1365 B.S. The plaintiffs
thereupon issued notice, dated March 31, 1966, terminating
the licence and then filed Suit No. 37 of 1960 for ejectment
of the respondent in the Court of the Munsif, Second Court,
Chandernagore.
The suit was resisted by the defendant-respondents,
inter alia, on the ground that the land had vested in the
State under the West Bengal Estates Acquisition Act, 1953
(hereinafter referred to as the Acquisition Act); that they
were tenants, and not licensees, under the plaintiff and
after the date of vesting with effect from April 14, 1955,
became direct tenants under the State in respect of suit
land and were paying rent to the State.
The Trial Court dismissed the suit holding:
(i) that the defendants were not licensees, but
were tenants; and (ii) that the plaintiff was
not in khas possession on the date of the
vesting (April 14, 1955); so he could not
retain the land under Section 6(1) (i) of the
Act In the result, the suit was dismissed.
The first appellate Court reversed the decision of the
trial court and decreed the suit with the finding that the
grant being a licence, the plaintiff-intermediary was
entitled to retain the holding under Section 6 (1) (i) of
the Act.
Allowing the Second Appeal by the defendants, the High
Court held:
(a) that if the lease (Ex.A), being a lease for 9
years, was void under Section 107 of the
Transfer of Property Act, it would still
operate as a lease from month to month;
(b) it was not a licence; and
(c) section 28 of the Act applied and, as the
plaintiff was not directly working the mine
in the land, he could not retain it.
23
Aggrieved, the plaintiff has come in appeal by special
leave to this Court.
The principal question that falls to be determined is:
whether Section 6 or Section 28 of the Acquisition Act
governs the case ? The High Court has held that it is
Section 28, and not Section 6, which is applicable; while
the appellant contends that Section 6 is applicable by
virtue of which he is entitled to retain the holding.
Section 6, so far as relevant for our purposes, is in
these terms:
"6. Rights of intermediary to retain certain
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kinds-
(1) Notwithstanding anything contained in
Sections 4 and 5, an intermediary shall,
except in the cases mentioned in the proviso
to sub-section (2) but subject to the other
provisions of that sub-section, be entitled
to retain with effect from the date of
vesting;..............
(i) Where the intermediary is... an institution
established exclusively for a religious or a
charitable purpose, or both, or is a person
holding under a trust or an endowment or
other legal obligation exclusively for a
purpose which is charitable or religious or
both-land held in khas by such .. institution
or person, not being a tenant, by leave or
licence of such.. institution or person."
The contention of the learned counsel for the appellant
is that since the suit land was held by the appellant-
intermediary in khas for a religious purpose through a
licensee-the defendant being a licensee, and not a tenant-he
would be entitled to retain and hold this land from the date
of vesting by virtue of clause (i) of sub-section (1) of
Section 6.
The other relevant provisions are in Chapter IV of the
Acquisition Act. They are as follows:
"Sec. 27. Provisions of Chapter IV to override
other pro visions of the Act.-The provisions of this
Chapter shall have effect notwithstanding anything to
the contrary elsewhere in this Act."
"Sec. 28. Right of intermediaries directly working
mines.-So much of the land in a notified area held by
an intermediary immediately before the date of vesting
(including sub-soil rights therein, but excluding
rights in hats and bazars not in the khas possession of
the intermediary and land comprising forests, if any)
as was comprised in or as appertained to any mine which
was being directly worked
24
by him immediately before such date shall with effect from
such date be deemed to have been leased by the State
Government to such .. intermediary. The terms and conditions
of such lease shall be as agreed upon between him and the
State Government, or in default of agreement as may be
settled by the Mines Tribunal:
Provided that all such terms and conditions shall
be consistent with the provisions of any Central Act
for the time being in force relating to the grant of
mining leases."
Section 2(j) of the Mines Act, 1952, defines ’Mine’ to
mean "any excavation where any operation for the purpose of
searching for obtaining mineral has been or is being carried
on and includes.. "
"Minor Minerals" as defined in clause (e) of Section 3
of the Mines and Minerals (Regulation and Development) Act,
(No. 67 OF 1957) include "ordinary sand". Clause (c) of the
same Section defines "mining lease" as a "lease granted for
the purpose of undertaking mining operations, and includes a
sub-lease granted for such purpose." Clause (d) of the same
Section defines "mining operations" to mean "any operations
undertaken for the purpose of winning any minerals."
Before the High Court, it was common ground between the
parties that the land in dispute has a sub-soil deposit of
sand and the rights granted to the respondent, under the
document (Ex. I); styled as a ’licence’, were "to raise" and
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"take" away that deposit of sand. Before us, an attempt was
made to deviate from that stand by con tending that the
deposits of sand are on the surface in the shape of sand-
dunes and for removing the same no excavation or mining
operations are necessary.
The contention must be repelled. The definition of
"mining operations" and "mine", noticed above, are very
wide. The expression "winning of mineral" in the definition
of ’mining operations’ is spacious enough to comprehend
every activity by which the mineral is extracted or obtained
from the earth irrespective of whether such activity is
carried out on the surface or in the bowels of the earth. As
pointed out by this Court in B. Dass v. State of Uttar
Pradesh(1), it is wrong to assume that mines and minerals
must always be sub-soil and that there can be no minerals on
the surface of the earth.
It is true that in the definition of "Mine", the term
"excavation", in the ordinary dictionary sense, means
"hole", "hollow" or "cavity made by digging out". But the
word "any" prefixed to "excavation"
(1) [1976] 3 S.C.R. 869.
25
in the context of the phrase "for the purpose of searching
for or obtaining mineral" gives it a much more extensive
connotation, so that every "excavation", be it in the shape
of an open-cast cavity or a subterranean tunnelling, will
fall within the definition of ’Mine’. Similarly, it is not a
requirement of the definition of ’mining operation’ that the
activity for winning the mineral, must necessarily be an
under ground activity. The essence of ’mining operations’ is
that it must be an activity for winning a mineral, whether
on the surface or beneath the surface of earth. Thus
considered, the land ill dispute having large deposits of
sand, which is a minor mineral, was admittedly being
excavated and removed by the defendant, was at the date of
vesting "comprised in or appertained to a mine" within the
meaning of Section 28.
Having seen that the land in dispute is a ’mine’ in
which ’mining operations’ were being carried on, the further
question to be considered is, whether this mine was "being
directly worked" by the appellant intermediary ? The word
"directly", according to Webster’s New World Dictionary
means "in a direct way, without a person or thing 1 coming
between"; "immediately: as directly responsible". The use of
the expression "directly" in the context of the word
"worked", follow ed by the words "by him", unmistakably
shows that the legislative intent was to allow only those
intermediaries to retain land comprised in or appertaining
to a mine, as lessees under the State, who immediately
before the date of vesting, were working the mine under
their immediate control, management and supervision. Thus
construed, the phrase "being directly worked by him" in the
Section will not take in a case were the mine was being
worked through a lessee or licensee to whom the right to
conduct mining operations and to take away the mineral had
been granted by the intermediary in consideration of
receiving a periodic rent, royalty or a like amount.
It was contended by the learned counsel for the
appellant, that this interpretation of the phrase "directly
worked by him", is inapplicable to an intermediary who is an
idol because an idol, albeit a juristic person, has perforce
to work the mine through a lessee or licensee.
The argument is ingenious but untenable. The idol held
the suit land comprised in the mine as an intermediary, only
in the juristic sense, but, in fact he was exercising his
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rights in the suit land, through his human representative,
the Shebait, Mohanta Srimat Dandi Swami. The Shebait could
in that representative capacity, directly work the mine
himself. But, instead of doing so, he, on April 27, 1950
granted the right of carrying on mining operations in the
land and taking away the mineral, on payment of an annual
sum for a period of 9 years to
3-196SCI/79
26
the respondents. Thus, irrespective of whether this
transaction or grant, dated April 27, 1950, was a lease or a
license, the fact remains that immediately before the date
of vesting, the mine in the suit land, was not being
"directly worked " by the intermediary within the con
templation of Section 28.
The provisions of Section 6(1) (i) of the Acquisition
Act, extracted earlier, give to an intermediary a right to
retain land held by him in khas for the purposes mentioned
therein, through a licensee. Section 28, as construed by us,
denies the right to retain the land comprised in a mine or
appertaining to a mine, it, at the material date, it was not
being directly worked by the, intermediary but through a
licensee, or other agency to whom the right to conduct
mining operations had been granted by the intermediary. In
that respect, the provisions of Section 28 (in Chapter IV)
are contrary to those of Section 6(1) (i). In this
situation, according to the legislative mandate in Section
27, the provisions of Section 6(1)(i) must yield to those in
Section 28.
Assuming arguendo, that the plaintiff was at the
material time, holding the land in khas through a licensee
and fulfilled all other conditions which entitled him to
retain under Section 6(1) (i), then also, this case being in
conflict with Section 28, the latter Section would prevail
over the former.
In this view of the matter, it is not, strictly
speaking, necessary to resolve the controversy as to whether
the transaction (Ex. I) dated April 27, 1950, was a lease or
a license. But, as in the Courts below, and here also, a
good deal of argument was addressed on this point, we
propose to go into the same.
It is well-settled that in ascertaining the real
character of a document, regard must be had to the substance
of the transaction and not merely the words or the form in
which it is dressed. The Agreement (Ex. I), which is named
as a licence, is to be construed in the light of this
cardinal canon.
The Agreement (Ex. I) is not a very lengthy document.
The material part of this document may be extracted as
below:
"This deed of Agreement is executed to the effect
following:-
................ We the First Party, have been
carrying on the business of sand near Haripal Station.
Sand was necessary for carrying on the said business
and the said sand Lying inside the land described in
the schedule below should be taken out and proposal
having been made to the second parties for the purpose
of business, the second parties agreed to take
settlement to the effect that we can take out
27
the sands of the said lands and become bound by the
agreement on the following terms and conditions of
taking out the sand from the said land only.
TERMS AND CONDITIONS
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1. The sand which is in the said land belongs to the
own share of the First Party and should be taken
out within the month of Chaitra from 1357 to 1365.
2. Save and except the raising of the said sand there
will be no right, title and interest in the land
with the First Party. No right, title and interest
will accrue to the First Party in respect of the
land.
3. The First Party for the purpose of raising sand,
will pay Rs. 66/- (Rupees sixty six) per annum as
the price of the said sand. If the Government
fixes any new amount of demand, then, save and
except this, they will take the said amount of Rs.
66/- and/or the Second Party will not be entitled
to claim the same. If the amount is not paid
within the month of Chaitra every year, then the
parties will not be entitled to raise the sand
next year, and for realisation of the said amount
of Rs. 66/-, Second Party can bring a suit against
the First Party, and will get the arrears of
interest at the rate of 12%.
4. At the end of the stipulated period, the Second
Party will take khas possession of the said land;
and the licence of the First Party will be
revoked...."
(Emphasis added)
From what has been extracted above, the following
characteristics of the transaction are clear: F
(i) A right to "raise" and "take out" and remove
sand "lying inside" the land in dispute was
granted by the plaintiff to the defendant.
The words "raise" and "take out sand" from
"inside" the land are wide enough to include
not only the "right to carry out all the
operations" necessary for extracting sand,
but also to take it away and appropriate it.
Construed in the context of the document as a
whole, these words put it beyond doubt that
rights to carry out mining operations"
[within the definition in clause (d) of
Section 3 of the Central Act 67 of 1957] for
winning sand and to appropriate it were
granted.
(ii) The rights were granted for a period of 9
years, commencing from April 27, 1950.
28
(iii)These rights were granted for a "price" fixed
on yearly basis, irrespective of the quantity
of sand extracted. The "price" fixed is Rs.
66/- per annum. This consideration is payable
0in the month of Chaitra every year. In case
of default, the First Party (grantee) shall
not be entitled "to raise" the sand "next
year" and the Second Party (grantor) shall
have a right to recover the arrears of rent
together with interest at 12% by bringing a
suit against the First Party.
(iv) "The Second Party will be entitled to take
khas possession of the land" "at the end of
the stipulated period". This condition,
(contained in paragraph 4 of Ex.I) read along
with the other parts of the document,
necessarily implies that if the First Party
continues to pay the "price", as stipulated,
(a) he shall be entitled to enter into and
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remain in exclusive khas possession of the
land for the purpose of carrying out the
mining operations for the full stipulated
period of 9 years and (b) the Second Party
(plaintiff) will not be entitled to retake
khas possession of the land and revoke the
so-called "license" before the end of the
said period of 9 years.
It is contended on behalf of the appellant that,
according to Condition 2 of the Agreement (extracted above),
"except the raising of the sand", no right, title and
interest in the land was given to the defendant. It is
submitted that in view of this express condition, the
transaction was only a ’licence’. Relying on Paragraph 899
of Halsbury’s Laws of England, 3rd Edition, Vol. 26, it is
maintained that, in any case, it is not a ’lease’ as defined
in Section 105 of the Transfer of Property Act, but only a
contract to sell sand, the price being pay able in yearly
instalments. It is emphasised that the essential
characteristic of a "lease" is that the subject is one which
is occupied and enjoyed and the corpus of which does! not in
the nature of things and by reason of user disappear.
Reference has also been made to the dictum of the Judicial
Committee of the Privy Council in Raj Kumar Thakur Giridhari
Singh v. Megh Lal Pandey(l), and the decision of the House
of Lords in Gowan v. Christie(2).
We are unable to accept these contentions.
Para 899 of Halsbury’s Laws of England (ibid) reads,
thus:
"A lease may be granted of land or any part
thereof, and since minerals are a part of the land it
follows that a
(1) L. R 44 I.A.246.
(2) [1873] L. R. 2. H. L. (Sc.) 278.
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lease can be granted to the surface of the land and the
A minerals below, or of the surface alone, or of the
minerals alone. It has been said that a contract for
the working and getting of minerals alone though for
convenience called a mining lease, is not in reality a
Lease, at all in the sense in which one speaks of an
agricultural lease, and that such a contract, properly
considered, is really a sale of a portion of 1 the land
at a price payable by instalments, that is, by way of
rent or royalty, spread over a number of years."
This statement of the law in England, appears to be
founded on the observations of Cairns, L. J. in Gowan v.
Christie (ibid) and Gozens Hardy, L.J. in Aldam’s Settled
Estate(1).
In Raj Kumar Thakur Giridhari Singh (ibid), Lord Shaw,
delivering the opinion of the Board, said that "it must be
born in mind also that the essential characteristic of a
lease is that the subject is one which is occupied and
enjoyed and the corpus of which does not in the nature of
things and by reason of the user disappear". Counsel for the
appellant has adopted this very argument. But this
observation should not be torn out of the context. Lord Shaw
had further observed: "In order to cause the latter
speciality to arise, minerals must be expressly denominated,
so as thus to permit of the idea of partial consumption of
the subject leased". Thus, Lord Shaw had himself pointed out
that minerals may be made a part of the subject-matter of a
lease, and in such a case the lease would permit the idea of
the partial consumption of the subject-matter of the lease.
It is important to bear in mind that the term "lease"
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occurring in the definition of "mining lease" given in
Section 3(c) of Act 67 of 1957 does not appear to have been
used in the narrow technical sense in which it is defined in
Section 105 of the Transfer of Property Act. But, as rightly
pointed out by a Bench of the Calcutta High Court in Fala
Krishna Pal v. Jagannath Marwari(2), a settlement of the
character of a mining lease is everywhere in India regarded
as ’lease’. A mining lease, therefore, may not meticulously
and strictly satisfy in all cases, all The characteristics
of a ’lease’ as defined in the Transfer of Property Act.
Nevertheless, in the accepted legal sense, it has always
been regarded as a lease in this country.
In Fala’s case (ibid) Mukerji, J., speaking for the
Bench, held that a coal mining settlement may be regarded as
satisfying the requirements of Section 105 and treated as a
lease because under such H
(1) [1902] 2 Ch. 46 at page 56.
(2) I. L. R. 59 Cal. 1314.
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settlement some portion, however small, of the surface has
to be used for carrying on the mining operations and taking
the coal out.
Be that as it may, in the instant case, as shall be
presently discussed, the transaction evidenced by Ex. I, not
only falls within the definition of a "mining lease" under
Act 67 of 1957, but also partakes of all the essential
characteristics of a ’lease’ defined in Section 105 of the
Transfer of Property Act.
Section 105, Transfer of Property Act, defines a
’lease’ of immovable property as-
"a transfer of a right to enjoy such property,
made for a a certain time, express or implied, or in
perpetuity, in consideration of a price paid or
promised, or of money, a share of crops, service or any
other thing of value, to be rendered periodically or on
specified occasions to the transferor by the
transferee, who accepts the transfer on such terms."
In the second paragraph of the Section, it is expressly
stated that the price so paid in consideration of the
transfer is called "the premium, and the money, share,
service, or other thing to be so rendered, is called the
rent."
The definition of ’immovable property’ given in Section
3, Para I of that Act is in the negative, and is not
exhaustive. Therefore, the definition given in Section 3(26)
of the General Clauses Act (X of 1897) will apply to the
expression used in this Act, except as modified by the
definition in the first clause of Section 3. According to
the definition given in Section 3(26) of the General Clauses
Act, "immovable property" shall include land, benefits to
arise out Or land, and things attached to the earth, or
permanently fastened to anything attached to the earth". In
short, the expression ’immovable property’ comprehends all
that would be real property according to English Law and
possibly more. (See 1 I.A. 34). Thus, every interest in
immovable property or a benefit arising out of land, will be
’immovable property’ for the purpose of Section 105,
Transfer of Property Act.
A right to carry on mining operations in land to
extract a specified mineral and to remove and appropriate
that mineral, is a ’right to enjoy immovable property’
within the meaning of Section 105; more so, when-as in the
instant case-it is coupled with a right to be in its
exclusive khas possession for a specified period. The ’right
to enjoy immovable property’ spoken of in Section 105, means
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the right to enjoy the property in the manner in which that
property can be enjoyed. If the subject-matter of the lease
is mineral land or a sand-mine, as in the case
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before us, it can only be enjoyed and occupied by the lessee
by working it, as indicated in Section 108, Transfer of
Property Act, which regulates the rights and liabilities of
lessors and lessees of immovable property.
In the view we take, we are supported by the
observations of the Judicial Committee in Nageshwar Bux Roy
v. Bengal Coal Company(1). Delivering the opinion of the
Board, Lord Macmillan said:
"In considering the character and effect of acts
of possession in the case of a mineral field, it is
necessary to bear in mind the nature of the subject and
the possession of which it is susceptible. Owing to the
inaccessibility of minerals in the earth, it is not
possible to take actual physical possession at once of
a whole mineral field: it can be occupied only by
extracting the minerals and until the whole minerals
are ex hausted the physical occupation must necessarily
be partial."
In H. V. Low & Co. Ltd. v. Jyoti Prasad Singh Deo(2),
the law, as laid down in Gowan’s case (ibid), was strongly
relied upon by the appellants, therein. Negativing this
contention, the Judicial Committee pointed out that the
rights and liabilities of lessor and lessee are defined in
Section 108 of the Transfer of Property Act, and the
appellant h ad not shown that the respondent had failed, or
was not in a position to perform the duties incumbent on a
lessor under Section 108 of the said Act.
The discussion will not be complete without noticing,
the decision of the Patna High Court in Commissioner of
Income Tax, Bihar & Orissa v. Kumar Kanakhaya Narain
Singh(3), which is ill point. In that case. after an
exhaustive survey of all the decisions on the subject,
(including some of those which have been cited before us) a
Full Bench consisting of three eminent Judges, held that
coal-mining settlements whereby certain rights of entering
upon the land of the settlor, sinking shafts etc. and
winning and taking away the coal are granted in
consideration of receiving a salami and annual sums computed
on the amount of coal raised and the amount of coke
manufactured, subject always to a minimum annual sum which
was always payable irrespective of what coal was raised or
coke manufactured, were not "a sale of coal", but could be
regarded as ’leases’ within the meaning of Section 105 read
with Section 108, Transfer of Property Act, or with-
(1) [1930] L. R. 58 I. A. 29.
(2) [1931] 1. L. R. 59 Cal. 699; L. R. 58 I. A. 392.
(3) 1. L. R. (XX) Patna 13.
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in the legal acceptance of the term "lease" in this country.
This decision of the High Court was affirmed by the Judicial
Committee, and the appeal filed by Kumar Kanakhaya was
dismissed. (See L.R. 70 I.A. 180).
The ratio of the Patna case applies with greater force
to the facts of the case before us, because, herein, (a) the
annual fixed payment had no relation, whatever, with the
quantity of sand extracted and appropriate(i, and, what is
more important, (b) the defendant was given a right to enter
into and remain in khas possession of the mineral field for
the stipulated period of 9 years. The transaction (Ex. I),
though labelled as a licence, has all essential elements of
a ’lease’ ever. under Section 105 of the Transfer for
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Property Act. In short, stripped of the form in which it is
draped, the Agreement (Ex. I), in substance and in fact, is
a ’lease’ in the accepted legal sense of the term and not a
’licence’ as defined in Section 52 of the Indian Easements
Act. If this be the correct construction of the document,
and we think it is so it is doubtful whether Section 6(1)
(i) could cover the appellant’s case and give him a right to
retain the land in dispute eve if Section 28 was out of his
way.
In sum, we may reiterate that even on the assumption
that the respondent was a licensee, the appellant will not
be entitled to retain the holding because he was not
directly working the mine immediately before the date of
vesting, and as such, will not be entitled to retain, due to
the overriding operation of Section 28.
For all the foregoing reasons, the appeal fails and is
dismissed. In the circumstances of the case, however, there
will be no order as to costs.
V.D.K. Appeal dismissed.
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